USA

U.S. Services Sector Growth Slows For 2nd Straight Month In Aug. The pace of growth in the U.S. services sector fell for a second straight month in August, dropping to its lowest level since May, a survey showed on Monday. Financial data firm Markit said its preliminary services Purchasing Managers Index fell to 58.5 in August, below both the July reading of 60.8 and the analyst expectation for a read of 59.5. A reading above 50 signals expansion in economic activity. (Reuters)

Slowing Home Sales Show U.S. Market Lacks Momentum. The pace of new-home sales fell to the slowest in four months in July, signaling U.S. real estate lacks the vigor to propel faster growth in the economy. Purchases unexpectedly declined 2.4% to a 412,000annualized pace, weaker than the lowest estimate of economists surveyed by Bloomberg, Commerce Department data showed today in Washington. June purchases were revised up to a 422,000 rate after a May gain that was also bigger than previously estimated. (Bloomberg)

Europe

Euro Zone Bond Yields Fall As ECB's Draghi Boosts QE Speculation. Euro zone bond yields fell sharply on Monday after European Central Bank President Mario Draghi boosted speculation that the monetary authority will eventually loosen its policy by printing money. In stronger language than he has used in the past, Draghi said on Friday at an annual meeting of central bankers in Jackson Hole, Wyoming, that the ECB was prepared to respond with all its "available" tools should inflation drop further. German 10-year yields were down 3 basis points at 0.958%, close to their record lows of 0.952%. German Bund futures were up 43 ticks at 150.70. Spanish and Italian 10-year yields fell 8 bps to 2.31% and 2.51%, respectively, while Portuguese yields fell 14 bps to 3.12%. (Reuters)

UK Manufacturing Wages On The Rise, Says EEF Survey. Wages in the manufacturing sector are rising faster than most other parts of the economy, a survey has suggested. Engineering and manufacturing employers' organisation EEF found that pay rose by 2.6% over the past year while wages have been stagnant or falling in other industries. EEF said business confidence in the sector was improving. The study came as the Bank of England said low wage increases could become the norm over the next few years. (BBC)

Hollande Replaces Cabinet As EU Austerity Rebellion Stirs. French President Francois Hollande’s firing of malcontent minister Arnaud Montebourg risks unleashing the ruling Socialist Party’s chief critic of budget cuts, adding to an austerity backlash stirring across Europe. Montebourg, 51, industry minister for the past two years, will not be part of the new team Hollande names today after he publicly criticized the president for “slavish” and “dogmatic” deficit reduction that he said stokes unemployment. The dismissal of a top minister underlines the political crisis confronting Hollande as he seeks to balance European Union pressure to reduce the deficit with domestic demands to revive a stalled economy. It also exposes a wider rift in Europe as Italy uses its six-month presidency of the 28-nation EU to make a stand against a German-led drive to clamp down on spending. (Bloomberg)

Currencies

Euro Falls Below $1.32, Hits Lowest Level In Nearly A Year. The euro fell below $1.32 for the first time in nearly a year Monday following Mario Draghi’s unexpected suggestion on Friday that more stimulus could be on the way for the euro zone. The euro traded at $1.3195, down from $1.3242 late Friday in New York. The euro traded at 137.20 yen Monday, down from ¥137.67 Friday. The dollar was trading flat at ¥103.98 Monday. The pound traded at $1.6583, up from $1.6572 late Friday. (Market Watch)

Commodities

Gold Eases Toward 2-Month Low On Stronger Dollar, Equities. Gold slipped on Monday, hovering near its lowest in two months, under pressure from a stronger U.S. dollar and from rallying global financial markets. Gold fell 0.3% at $1,277.19 an ounce by 1:52 p.m. EDT (1752 GMT). The metal last week posted a weekly loss of 1.8%, its biggest such fall in a month, after it set a two-month low at $1,273.06 on Thursday, hurt by strong U.S. economic data and speculation of an early interest rate increase. Tracking gold, silver was down 0.3% to $19.35 an ounce, after matching but breaching Thursday's two-month low of $19.25. Spot platinum slipped 0.2% to $1,413.50 an ounce, having touched its lowest since May 5 at $1,407.30 last week. Spot palladium edged up 0.3% at $886 an ounce. (Reuters)

U.S. Crude Edges Lower In Light Trading On Weak Economic Data. Brent crude oil edged higher on Monday while U.S. crude fell in light trading, as support from geopolitical tensions in Ukraine and Libya offset ample supplies and anticipated weak demand after a slew of disappointing economic data from the United States and Europe. Brent crude rose 36 cents to settle at $102.65 a barrel. It hit a 14-month low of $101.07 on Aug. 19. U.S. crude fell by 30 cents to settle at $93.35 a barrel. (Reuters)